- Tony PorterTony PorterDepartment of Political Science, McMaster University
The literature on the global organization of finance has grown along with the global financial system, but also in response to theoretical innovations that suggested new lines of inquiry. In the 1970s and early 1980s, the emerging field of international political economy began to make valuable contributions to our understanding of global finance, but these focused on monetary politics or the formal intergovernmental organizations such as the IMF. By the 1990s, the literature focused on the greater complexity evident in global finance as traditional bank lending was increasingly displaced by other types of financial instruments, such as bonds, equities, and derivatives, which were also spreading geographically to influence “emerging markets” in the developing world and in countries in transition from communism. Since the mid-1990s, three interconnected changes in theory and practice are evident in international political economy (IPE) literature on the global organization of finance. First, the theoretical changes that characterized the broader fields of international relations and IPE were evident in the study of the global organization of finance as well, including the emergence of a new divide separating rational choice approaches from constructivism and other approaches. Second, the growing prominence of the concepts of globalization and global governance in the study and practice of international affairs inspired new literatures that overlapped and interacted with the IPE literature. Third, criticisms of globalized financial markets and questions of accountability and democracy directed at these markets grew and their role in structural adjustment.